Did her husband itemize? Not knowing anything about his situation, $2,100 in interest isn't sufficient on its own to itemize. Both spouses must either itemize or use the standard deduction.

Both itemized. And $2100 wasn't the interest deduction. It was the amount IRS said she owed. About $100 was interest and the rest was tax. No penalties were charged. IRS conveniently enclosed a payment plan in hopes she would just accept their decree. If it's only documentation, which she says their letter indicates, I think she has a good chance to win this one. She has a copy of the 1098 so it's certainly worth writing a letter. 2009 was their first year filing separately but she may face the same issue for 2010 and eventually 2011.